USD/CAD dropped to as low as 1.3330 last week but recovered ahead of 1.3315 low. A short term bottom is probably in place. Initial bias will stay mildly on the upside for further rebound to 1.3715 resistance. Break will target 38.2% retracement of 1.4667 to 1.3315 at 1.3831. On the downside, firm break of 1.3315 will resume the fall from 1.4667 instead.

In the bigger picture, the rise from 1.2061 (2017 low) could have completed at 1.4667 after failing 1.4689 (2016 high). Fall from 1.4667 could be the third leg of the corrective pattern from 1.4689. Deeper fall is expected to 61.8% retracement of 1.2061 to 1.4667 at 1.3056 and possibly below. This will now remain the favored case as long as 1.3855 support turned resistance holds. However, sustained break of 1.3855 will turn focus back to 1.4689 key resistance.

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In the longer term picture, the bullish case of resuming the up trend from 0.9506 (2007 low) is delayed. Consolidation from 1.4689 is extending for another medium term fall. As long as 1.2061 support holds, such up trend should still resume through 1.4689 at a later stage.

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